The Ravens and tight end Dennis Pitta were thankful to avoid the legal standoff that just unfolded between the New Orleans Saints and star tight end Jimmy Graham.

Graham lost a grievance hearing Wednesday as NFL arbitrator Stephen Burbank ruled that he's officially a tight end and only eligible for a $7.035 million tight end franchise tag rather than the far more lucrative $12.3 million wide receiver franchise designation.

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When negotiations stalled at one point in February prior to Pitta being locked up with a five-year, $32 million contract in March, a potential grievance was being contemplated if Pitta had been named the Ravens' franchise player. Rather than allow things to reach that stage, the Ravens didn't franchise Pitta and instead signed him to a long-term deal.

Burbank's ruling is a precedent-setting one, because it determined that despite Graham primarily lining up split out as a wide receiver, he's regarded as a tight end when it comes to contractual matters.

The NFL's collective bargaining agreement language says that the franchise designation should be derived by the position "at which the Franchise player participated in the most plays during the prior league year."

Burbank ruled that if a player is listed as a tight end, drafted as a tight end and only lines up a few yards split outside the tackles then the player is a tight end as far as he's concerned.

Burbank also reached his conclusion by heavily weighing that Graham is primarily covered by linebackers and safeties, not cornerbacks, in determining that he's a tight end.

"I conclude that Mr. Graham was at the position of tight end for purposes of Article 10, Section 2(a)(i) when, at the snap, he was aligned adjacent to or 'arm's-length' from the nearest offensive lineman and also when he was in the slot, at least if such alignment brought him within four yards of such linemen," Burbank wrote in his ruling. "The evidence also supports findings that, like tight ends, wide receivers and running backs often line up in the slot and that the defense employed against any player so aligned turns on the player's position, not his alignment, because of the physical attributes and skill sets of the players in those positions."

Graham has the option to appeal. The Saints are expected to eventually sign Graham to a blockbuster contract, but this ruling gives them leverage.

This ruling also affects versatile pass-catching tight ends in the future who may be reluctant to attempt a grievance if they're in a similar situation to Graham.

In Pitta's case, he lined up outside in the slot on 79.7 percent of his snaps in four games last season after returning from hip surgery. That was the most of any tight end in the NFL last season.

Pitta weighed in on the pending Graham situation during a news conference in March to announce his new contract.

"It's an intriguing debate," Pitta said. "I'm a little bit biased in my opinion obviously. I think in football it's interesting because you get labeled as something. Take Jimmy Graham for example. He gets labeled as a tight end and for whatever reason that somehow decreases his value. I don't understand that part of it. He's been a top producer in this league, certainly on his team. He led his team in catches, yards, touchdowns. ...

"Why all the sudden because he's labeled a tight end does that devalue his stock? I think it's something that he should challenge because it's not right that he can catch more touchdowns and yards than someone that is classified as a wide receiver yet because he has that tight end label, now all the sudden his value is cut in half."